O2 sells out of iPhones in the UK

08-05-2008

by Billy MacInnes

O2 UK has sold out of the 8GB iPhone three weeks after slashing the price by 37 percent, but is still charging Irish customers EUR399 for the end-of-life product.

An announcement on the O2 UK website confirmed the 8GB iPhone was no longer available. The company also ran out of the 16GB model at the same time, but stressed it would have more of the larger-capacity handset in stock soon.

In a statement, O2 UK said: "The 16GB iPhone was temporarily out of stock on our online store this morning. We are replenishing stock of the 16GB iPhone and customers wishing to purchase through our online store will be able to shortly."

But O2 was unable to provide a straightforward answer concerning future 8GB iPhone stocks. When asked by ENN whether there were any plans to replenish stocks, a spokeswoman replied: "We are currently reviewing our stock of the 8GB iPhone."

Carphone Warehouse in the UK was also out of stock of both versions of the iPhone on Thursday.

The clearance of 8GB iPhone stocks, which comes in the lead-up to the expected announcement of a 3G iPhone next month, adds further fuel to the fire of those who have complained about O2's pricing strategy for the device in Ireland.

At the time of the Irish iPhone launch in March, Cubic Telecom CEO Pat Phelan accused O2 of levying a "paddy tax" on Irish consumers because of the "massive difference" in tariff pricing between the UK and Ireland. He calculated Irish users were getting 175 minutes talk time, 100 texts and 1GB of data for STG35 while UK users paid the same for 600 minutes talk time, 500 texts and unlimited data.

Aside from tariff pricing, O2 and Apple are currently charging Irish customers EUR399 for the 8GB iPhone, 55 percent above the discounted price of STG169 in the UK(taking into account the different VAT rates in the UK and Ireland).

While O2 has kept UK pricing for the 16GB iPhone at STG329, the price is still 13 percent below the EUR499 charged in Ireland (again, taking the different VAT rates into account).

Citing the March 2008 launch of the iPhone in Ireland, the company's Irish operation has sought to defend the lack of a price promotion on the 8GB model by claiming it is in a different phase of the retail cycle compared to the UK, where the product launched in November 2007.

A spokeswoman for O2 Ireland added the iPhone was "going well" and it had "enough in stock to cater for demand at the minute".